BRUSSELS — One could say it’s taken years to get to this point, but really it was three weeks.
Three weeks in the dead of winter during which 18 of the 27 European Union member states saw their gas supplies reduced — or completely cut off — because of a commercial dispute between Russia’s Gazprom and Ukraine’s Naftogaz, the main suppliers to the EU.
While this had happened before on a smaller scale for a shorter time, the massive blow to European economies, trust and patience in January meant the EU finally got serious about establishing alternative energy suppliers (such as the Nabucco pipeline project) and protecting itself in case of another shutdown.
Clearly, EU leaders are concerned their gas could be shut off again, despite the January assurances from the Russian and Ukrainian governments that it wouldn’t happen. Ukraine is having trouble paying its summer bills to Russia and Moscow is again threatening to cut off supplies. At a head-of-state summit in June, Commission President Jose Manuel Barroso warned that “there is indeed the risk of another major crisis in weeks, not months.”
A quarter of the EU’s overall energy supply is provided by natural gas. Some member states depend entirely on imports and Russia is by far the largest single supplier, even the sole supplier in some of the eastern EU countries.
That’s why now, when most of Europe is basking in holiday sun, the European Commission is panicking about winter and has rushed to present new crisis-preparedness measures months earlier than they were expected.
Confirming that an energy disruption is “a probability,” Energy Commissioner Andris Piebalgs on Thursday announced steps he wants governments to take to prevent another freeze-out. Even while acknowledging the elephant standing next to him on the podium, Piebalgs said the new measures were not about Russia, but rather “establishing a gas market that is safe from any type of interruption of supply.”
Under the proposal, which still needs the approval of heads of state and the European Parliament, all member states would need to be in a state of continual readiness for a crisis. Within a year, each must assign a competent authority to prepare a “preventive action plan” outlining specific risks to national gas supplies and what measures could be taken to reduce the risks, as well as what procedures would be followed in the event of a disruption.
By 2014, Piebalgs said, governments would have to prove they had taken enough steps and sufficiently diversified to prove they could handle a theoretical 60-day period with no gas in the middle of winter, called the “N minus one” requirement.
Although Piebalgs encouraged states to increase their stores of natural gas, he said the Commission decided after lengthy discussion not to mandate it, as many countries are doing so anyway. Nor will states be required to share their gas in a crisis, but the new coordination mechanisms envision making voluntary cooperation easier.
The Commission would assume a much more active oversight role, including the right to declare an EU-wide emergency if supply is reduced by more than 10 percent, and ensuring that one country’s measures don’t harm a neighbor. “The regulations would empower the Commission with the role of coordinating internal solidarity mechanisms and make sure that Europe speaks with one voice with third countries in case of a community emergency,” Piebalgs explained.
This hands-on management would differ markedly from the Commission’s studiously aloof position in the early days of the January crisis, when spokespeople repeatedly dismissed the situation as a bilateral dispute between Russia and Ukraine.
The Commission proposals come just three days after a landmark accord, seven years in the making, was signed between four EU countries — Austria, Bulgaria, Hungary and Romania — and Turkey. The Nabucco pipeline would transport gas through the Balkan states to an Austrian hub from the Caspian region and the Middle East, bypassing the troublesome Russian-Ukrainian route.
Nabucco is named for the Verdi opera that signifies freedom from oppression, but it remains to be seen whether the project can do that. The earliest Nabucco would be operational — if everything goes well — is 2014 or 2015, small comfort if problems arise in winter 2009.
Construction would cost a daunting $11 billion, according to estimates. The EU has earmarked about $282 million to get started and the European Investment Bank has pledged to contribute about $3 billion in financing, but that leaves more than two-thirds of the budget unfunded.
Perhaps more concerning, it’s not clear what countries will fulfill the 31 billion cubic-meter capacity. Azerbaijan is seen as the most promising supplier, Iraq has committed to providing a large amount, and Egypt and Turkmenistan are among the other expected suppliers. Nabucco planners and the Turkish government have expressed hopes that Iran would also be a supplier, but the United States, a major supporter of the pipeline, has rejected that proposal.
And then there is Turkey, the country to which the EU is turning to escape dependence on Russia. The project is routinely called the “Nabucco card” in the Turkish press, indicating the leverage Turkey rightly believes it will have by hosting 2,000 of the 3,300 kilometers of the pipeline. Ankara has already tried to use that influence, in fact — the entire deal was long in question due to a Turkish demand, finally dropped, that it claim 15 percent of all the gas transported.
Relations between Turkey and the EU are in a particularly sensitive phase regarding Turkish accession to the bloc. Despite the maintenance of official commitment to the process by the European Commission, the negotiations that began in 2005 have moved very slowly and public enthusiasm is waning on both sides as acrimony is growing. The anti-Turkish membership tack used in campaigns for June’s European Parliamentary elections was particularly offensive to Ankara.
So, despite allowing the Nabucco agreement to go forward, “the Turks really are feeling rather miffed,” said Giles Meritt, director of the Security and Defense Agenda, a Brussels think tank. He noted that effects of the strain are visible everywhere from negotiations on Cyprus to cooperation in NATO. “And that’s not a very healthy basis on which for them to become the new transit country. If you thought the Russians were difficult ... .”
Nonetheless, Merritt said Nabucco — and even more important, the new Commission measures — are crucial steps toward a comprehensive European energy strategy that will increase solidarity and self-reliance, even if the measures won't be implemented until years from now.
“I hope it’s going to be a healthy shock to the Russians that the Europeans aren’t quite as hopeless about getting their act together and finding alternative gas supplies as the Russians apparently thought,” Merritt said.
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